Perils of Obamacare

Added to cato.org on July 20, 2009. This article appeared in the New York Post on July 20, 2009.

In making his case for a government takeover of the US health-care system, President Obama is going far beyond the usual Washington truth-stretching. Take a look at just a few of the most common claims: “If you like your current health-care plan, you can keep it.” Even White House spokesmen have said that Obama’s oft-repeated pledge that you can keep your current insurance isn’t meant to be taken literally.

PolitiFact has named “If you like your health care plan, you can keep it,” the Lie of the Year for 2013.

The reality is that millions of Americans — perhaps most Americans — will be forced to change insurance plans. First, the president supports an individual mandate — a requirement that every American buy health insurance. And not just any insurance but insurance that includes all the benefits government thinks you should have. That insurance could be more expensive or include benefits that people don’t want or are morally opposed to, such as abortion services. And that doesn’t just affect those without insurance today. The bills now before Congress say that while you won’t be immediately forced to switch from your current insurance to a government-specified plan, you’ll have to switch to satisfy the government’s requirements if you lose your current insurance or want to change plans.

Plus, the president supports the creation of a government insurance program that would compete with private insurance. But because this ultimately would be subsidized by American taxpayers, the government plan could keep its premiums artificially low or offer extra benefit. In the end, millions of Americans would be forced out of the insurance they have today and into the government plan. Businesses, in particular, would have every incentive to dump their workers into the public plan. The actuarial firm the Lewin Group estimates that as many as 118.5 million people, roughly two-thirds of those with insurance today, would be shifted from private to public coverage. “You will pay less.” The Congressional Budget Office has made it clear that the reform plans now being debated will increase overall health-care costs, yet President Obama on Friday repeatedly said that his reform would reduce costs and save Americans money.

Almost 80 million people with employer health plans could find their coverage canceled because they are not compliant with ObamaCare, several experts predicted.

Their losses would be in addition to the millions who found their individual coverage cancelled for the same reason.

Source: Fox News

But no matter how many times he says it, the truth is you will pay more — much more — both in higher taxes and in higher premiums. The final health-care bill is expected to cost more than $1 trillion over the next 10 years. That means much higher taxes, and not just for the wealthy. If one totals up all the new taxes in the House Democratic health-reform bill — the income surtax, the penalties on businesses and individuals that fail to buy into the government health plan, as well as other fees and taxes — the cost to US taxpayers will top $800 billion. New York City will face marginal tax rates as high as 57 percent. At a time of rising unemployment and economic

stagnation, that is like throwing an anchor to a drowning man. In addition, the new insurance regulations expected to be part of the final bill are likely to drive up insurance premiums. And, if the new government-run plan under-reimburses doctors and hospitals — as Medicare and Medicaid do — providers would be forced to recoup that lost income by shifting their costs to private insurance, driving up premiums. A study by the Council for Affordable Health Insurance estimates that the president’s proposals could increase premiums by 75 to 95 percent. “Quality will improve.” Anyone who thinks a government takeover of the healthcare system will improve quality of care has only to look at the health-care programs the government already runs: The Veterans Administration is overwhelmed with problems, Medicaid is notorious for providing poor quality at a high cost — and Medicare has huge gaps in coverage. Worse, however, on Friday, Obama endorsed the creation of a government board with the power to dictate how your doctor practices medicine and all but endorsed the rationing prevalent in nationalized health-care systems around the world. In short, when it comes to claims about the wondrous new world of governmentrun health care, a bit of skepticism might be in order.

The American Medical Association, which originally supported the Affordable Care Act, warned the rule could pose a “significant financial risk” for doctors and hospitals, and on Wednesday blasted out guidelines to help members try and avoid those costs.

At issue is a 90-day “grace period” which lets patients who are not paying their premiums keep coverage for 90 days before it can be canceled